Victoria’s local government watchdog says the state’s councils should create stand-alone policies governing councillor interactions with staff, after a review found less than half have a specific policy.

The recommendation is contained in a report by the Local Government Inspectorate released on Monday following a review of compliance with new laws designed to increase accountability and transparency in local government.

The new Local Government Act, which came into force in 2020, required councils to create a suite of new policies, or amend existing ones, within 18 months.

Mandatory policies include procurement, complaints, governance, election polices, gifts, community engagement, council expenses, and CEO employment and remuneration.

Policies about councillor relationships aren’t mandatory under the Act, but are recommended, Chief Municipal Inspector Michael Stefanovic said.

Policy review ‘pleasing’

A review carried out by the Local Government Inspectorate last year checked more than 1,000 documents from 79 councils.

Average compliance rate for the adoption of each of the policies and documents by the 79 councils was 93 per cent, Chief Municipal Inspector Michael Stefanovic said.

The highest compliance rate related to complaints processes, at 99 per cent. The lowest was councillor induction at 79 per cent.

“We were pleased to see that councils had acted quickly in adopting the new and updated policies required by the new Act, despite the challenging circumstances in the past two years,” Mr Stefanovic said.

“Overall, the quality of policies was pleasing.”

‘Minor issues’

He acknowledged he had been hoping for 100 per cent compliance and said a close look at a selection of documents revealed some ‘minor issues’.

One of the issues related to uncertainty about CEO employment, specifically, around the appointment of advisory committees.

Mr Stefanovic said while it is not mandatory for councils to appoint a CEO employment and remuneration matters advisory committee, Local Government Victoria (LGV) says it is “good practice” to do so.

The report recommends that for the sake of clarity LGV should “provide formal guidance about whether councils should appoint a CEO employment and remuneration matters advisory committee, what its powers should be and how independent professional advice should be obtained”.

Councillor relationships

The review also looked at whether councils had internal documents relating to councillor relationships with staff, other councillors and third parties.

It found less than half (49 per cent) had a policy about relationships with staff, only four per cent had policies relating to other councillors and none had policies relating to external third parties.

Mr Stefanovic said there is no formal requirement to develop policies around councillor relationships, but he recommended the creation of a stand-alone document separate from the code of conduct.

“Councils are strongly encouraged to develop a policy to guide the relationships and interactions between councillors and council staff,” he said.

“Councils should consider developing a policy for councillors interacting with third parties in an open and transparent way so that the public can be confident that decision-making is taking place in an unbiased way.”

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